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Read our buying tips before you shop for the holidays

November 22, 2005

2005 Holiday shopping keys: Sales galore, online shopping bots, lack of “must have” toys and stricter return policies

SAN FRANCISCO and AUSTIN, TX – If you like bargain hunting you may be in for a treat this holiday season, as experts predict retailers will be aggressive with sales from start to finish to move long-held inventory. New shopping season twists this year include the growing popularity of shopping comparison Web sites (“shopping bots”), the lack of a clear-cut popular toy that every child wants and the use of electronic gadgetry to monitor the return of merchandise, according to Consumers Union, publisher of Consumer Reports.
The National Retail Federation projects retail sales gains of 5% over last year, compared to a 6.7% increase in 2004.
“Our ‘Smart Holiday Shopping Tips, 2005’ are based on the premise that there’s plenty that we as consumers can do before, during and after our purchases to protect our hard-earned dollars,” says Gail Hillebrand, senior policy analyst with Consumers Union. “With a little advance planning, we can enjoy the holiday season and avoid waking up with a financial hangover when the New Year rolls in.”
Smart Holiday Shopping Tips, 2005


SET A BUDGET. STICK TO IT. The urge to buy on impulse during the holidays can be detrimental to your pocketbook. Remember, the best gifts are not necessarily the most expensive. A little creativity on your part can go a long way. Make a list of the people you plan to buy for, and record what you purchase and the amount you spend as you go.
COMPARE ONLINE BEFORE YOU SHOP. You can save on gas and headaches by spending time at home looking online for the items you want, rather than facing mall crowds and traffic jams. Once you spot the items you want you have the option of checking with local merchants to see if they carry them at a similar or better price. Have model and serial numbers in hand.
VISIT “SHOPPING BOTS” — BUY ONLINE. Shopping-comparison Web sites can cut down your bargain hunting time to minutes rather than days or weeks. A just-released Consumer Reports Money Adviser survey rates seven sites, primarily on pricing and ease of use. The top three rated are www.yahooshopping.com, www.shopping.com and www.froogle.com. While overall a smart way to shop and save money, beware of the following: (1) unexpected shipping costs, although most sites now have you type your Zip code to get total costs, including shipping; (2) poorly marked “refurbished” merchandise, and (3) listings given prominent placement on the site in exchange for fees paid by sellers.
CHECK THE VENDOR’S REPUTATION. Anyone can pose as a shop online company under almost any name. Ask for a paper catalogue or brochure if you are not familiar with the merchant. Also, become familiar with the company’s return policies before placing your order. Consumer Reports’ Web Watch project (http://www.consumerwebwatch.org/praise-worthy.cfm) can help you look for online retailers have pledged to abide by guidelines for improving Web credibility.
PROTECT YOUR PERSONAL INFORMATION. Identity theft can affect consumers of all ages, races, and incomes. The holiday season is a prime time for identity thieves to prowl. When exploring online purchases, think “ABC” to remember the privacy and security questions you should ask about a company.
About me. What information does the company collect about me and is it secure?
Benefits. How does the company use that information and is there a benefit to me?
Choices. What choices do you have about the company’s use of information about yourself? Can you opt-out of information uses and how?
CHECK OUT ONLINE RETURN POLICY BEFORE BUYING. Return shipping costs can be expensive, and some e-merchants charge a re-stocking fee on returned products. However, some chain retailers will allow you to return or exchange purchases made online to one of their brick-and-mortar stores with a receipt, so be sure to check their policy first. Some other e-tailers will pay shipping costs for returned products. With online purchases, you have the same rights as you would if making phone or mail-order purchases, so you should print your order confirmation and any other communication with the merchant. You should also ask for a gift receipt with online purchases.

CASH OR CHECKS. Cash has the advantage of keeping you from overspending, while paying in full for an item and keeping your name off of unsolicited mail lists. But don’t send cash in the mail, and don’t pay in cash or with a check or debit card when a product still has to be delivered to you. A check enables you to pay in full without the added risks of carrying cash. When using a check, make sure that you have the money in your account to cover it before you write the check. Bounced check fees by the store and bank can be expensive, so carefully monitor your account. You can stop payment on a check if you have a dispute with a merchant, but you may have to act quickly.
DEBIT CARDS. Debit cards are a good choice if you prefer not to carry cash or write checks. But theft of a debit card can give the thief access to your checking account, so use extra caution. Because purchases made with a debit card are withdrawn directly from your checking account, you cannot stop payment the way that you can with a check. If you shop on the Internet, don’t give out your debit card number online, to keep it from falling into the wrong hands in cyberspace. Since purchases made with a stolen debit card are equivalent to someone taking cash directly out of your bank account, you may experience financial difficulties while you are working with your bank to reverse the charges.
If your debit card is lost or stolen, report it immediately by phone then follow up with notification in writing. Federal law limits your liability to $50 if you report your loss promptly. Keep receipts and compare them with your bank statements, and immediately report any discrepancies. You will have to contact your bank to get your money back.
CREDIT CARDS. Credit cards can be very useful, especially for items that have to be delivered and that you can’t test until you open the box. However, it’s easy to become overextended with a credit card, so try to restrict purchases to what you can pay in full when the bill arrives, and try not to use a credit card if you are already carrying a balance.
By using a credit card, you will have more leverage to return a product than you would if you were to pay with a debit card or cash. Federal law gives you the right to defend against payment of a credit card charge if you show that the merchant failed to resolve a problem with the goods or services satisfactorily. This applies only if the item cost more than $50 and was purchased in your state, within 100 miles of your home, or from the credit card issuer. Also, stay away from credit card advances, which can be a costly way to borrow money.
GIFT CARDS. Pay attention to gift card ground rules if you intend to give a card this season or if you receive one. Some state laws protect you from “maintenance fees” or “inactivity fees” that kick in after a certain period of time, but not all states have these laws, and some state laws don’t apply to gift cards issued by banks. Read the details about fees on the card or accompanying packaging. Keep the receipt you get when you order the card, and write down the card’s ID number in case your card is lost or stolen. To avoid fees and the possibility of the card expiring, consider giving cash or a check instead of a gift card.

SAVE ALL RECEIPTS AND PROOFS OF PURCHASE. If your purchase doesn’t work as advertised, promptly return it and ask for a full refund or replacement. If you are still dissatisfied, contact the merchant and manufacturer in writing. If you get no resolution, complain in writing to the local district attorney’s office or consumer affairs office. If you buy a gift your recipient might have to return, consider paying cash for it. If you pay for the gift by credit card, some stores will not refund cash to the recipient upon the item’s return.
KEEP ALL RECORDS OF ONLINE TRANSACTIONS. Make printouts of: (1) Web pages indicating the company’s name, phone number and address; (2) an order confirmation page, or similar page, with a description of items ordered and confirmation number; (3) the site’s policies for returns, security, etc.; (4) any correspondence you exchange with the merchant, including emails in which you give notification of product defects and the merchant’s responses; and (5) make sure that all of these browser-page printout items are dated.
STINGY RETURN POLICIES; ELECTRONIC MONITORING. In its free online Holiday Giving Guide for 2005, Consumer Reports notes that “Many stores are getting stricter, primarily by employing computerized authorization systems to track and limit returns. The goal is to curb fraudulent returns, although innocent consumers can easily get snagged by these systems.” In certain stores, people who routinely return items or return items of high value are more likely to end up talking to the store manager before a return is accepted, if it’s accepted at all. Find out more at http://www.consumerreports.org/cro/electronics-computers/holiday-giving-guide.htm.
SEEK HELP FOR DEBT PROBLEMS. If you have trouble with your debts, contact the nonprofit Consumer Credit Counseling Service in your area to help you budget and to negotiate a payment plan with your creditors. You can find your local credit counseling service by contacting the National Foundation for Credit Counseling at www.nfcc.org or at (301) 589-5600.
CONSIDER ALTERNATIVES TO BUYING. It’s easy sometimes to get caught up in yearly holiday shopping excess. As the malls become congested, consider alternative gifts. For example, a charitable contribution made in the recipient’s name can be an ideal gift that exemplifies the true spirit of the holiday season. Sometimes the best gifts are homemade ones or gifts that give your time.
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Gail Hillebrand (415) 431-6747, ext. 136
or Rafael Ayuso (512) 477-4431, ext. 114